Wednesday, February 15, 2012

The debate about foreign ownership is mainly about who owns and controls NZ’s economy. It is linked to another debate about rising social inequality. For the NACTs [National/ACT Govt] and the NZ comprador ruling class NZ’s growth had always been determined by its ‘dependency’ on Britain, the US and Australia. The best NZ can hope for is to be competitive in the global economy so that ‘growth’ will enrich the compradors and buy off working class discontent. For the left the issue has always been economic independence; how to become self-sufficient and egalitarian in sharing the national wealth. But it is a myth to say that NZ has been decolonised, egalitarian and even ‘imperialist’. NZ was always foreign owned and controlled since its European settlement. Inequality in NZ cannot be understood unless you understand why NZ is a capitalist semi-colony. The colonial institutions have become semi-colonial institutions. NZ is formally a sovereign nation yet its semi-colonial dependence is even more obvious today than any time in its history now that China looms as an emerging imperialist power. NZ’s decolonisation is still ahead of us. Our task is to fight for that independence, not as a capitalist nation, but as a socialist republic.

Simon Collins series of articles in the NZHerald provides plenty of evidence for the social effects of rising inequality in NZ. We get first hand information about the extent of poverty and its impact on health, education and on the lives of the poor. The first article reported Dr Fiona Cram’s research that shows that, despite the ravings of Michael Laws about ‘feral families’, poverty and discrimination are the main causes of ‘Maori Child Abuse’. Collins claims that inequality is recent. This is the result of historical amnesia. The post-war boom revived the myth of NZ as egalitarian, founded by the liberals in the 1890s. Fabian reformers like WP Reeves Labour Minister in first Liberal Government of the 1890s and socialists like Harry Holland, leaders of the First Labour Government in the 1930s, are cited as the epoch-making giants of social democracy that allowed NZ to abolish the evils of social classes.

In reality, NZ was always an unequal society and the 1890s and 1930s were but short bursts of social reform in an otherwise bleak history of racial and class inequality. It has taken the period since the 1970s to reawaken NZ to the existence of classes, and the continued impoverishment of many working class families. This is because crises are the norm in NZ. The first was the Long Depression of the 1880s which brought the colony to virtual collapse and a Liberal Government backed by workers and landless farmers stole millions more acres of Maori land to settle the landless and expand the mines. The second was the Great Depression of the 1930s that saw the real unemployment rise to 30% and thousands of poor farmers walk of the land. This brought the Labour Party to government for 14 years on a program of economic regulation and protectionism. The current crisis began in around 1973 during the Third Labour Governments term with the oil crisis. This brought the post-war boom to an abrupt halt and proved yet again that the booms were hot air balloons in the long downturns in NZ history. End of the Postwar Boom

But this time the downturn was more permanent. NZ had exhausted its ability to develop behind tariff barriers to protect local manufacturers from overseas competition. Local firms like Watties and Fletchers were now national monopolies and had to expand offshore or die. Foreign branch plants like Borthwicks, ICI and Lever Bros were dominant in their sectors and demanding the right to repatriate profits to their multinational headquarters. The global downturn in pastoral exports now converged with the demand by capital to open up the economy to the global market. NZ manufacturing had outgrown the local market and to survive had to compete internationally. The National Party under Muldoon had tried desperately to insulate the economy from the global crisis and globalisation. Then as if to prove that the Labourite ‘classless society’ was a myth, it was the Labour Government that was forced to undertake the shock therapy of killing off its own protectionist heritage. This proved that historically the ideal of class equality was always dependent upon the capitalist class profitability. Equality was a luxury that only the bosses could afford.

The rise in inequality that resulted from Rogernomics, Ruthonomics and the return of National to office in 2008, proved beyond doubt that NZ remains essentially a semi-colony in which the imperialist powers plunder raw materials and labour power to extract their super profits. NZs economy is devoted to ‘rip, shit and bust’ - ripping out raw materials, depositing shit across the rest of society, and going bust as it gets deeper in debt. Its role is as a provider of raw materials and food for the imperialist countries. The period between 1935 and 1970s when NZ was a ‘rich’ country is an aberration. Economic nationalism was always a temporary refuge in response to depression and war. The 100 years before 1935 and the 40 years since the oil shock of 1973 proves that in the long run NZ is a weak, dependent semi-colony on Britain, the US, Australia and now China. That’s the story. It explains why ‘protectionism’ was short-lived so that since 1973 NZ has rapidly slid down the developed OECD countries league into so-called ‘third world’ status.

Semi-colony inequality

The definition of a semi-colony is a country that is owned and controlled by imperialism but which is politically sovereign or independent. But what does political sovereignty amount to when the key sectors of the economy are foreign owned and controlled? It means that the nation state is nothing but the agent of imperialism and the national capitalist class a comprador class of agents of imperialism. That means that foreign capital owns the key sectors of the economy. The value that is created by the working class is largely exported as profits. The biggest drains are the Big four Banks owned by Australian banks which made $32billion in profits in 2011.

Brian Gaynor reports: “The Bank of New Zealand was sold to National Australia Bank (NAB) for $1.5 billion in 1992. Since then BNZ has distributed $5.2 billion in dividends to its Australian parent and is now worth an estimated $7.2 billion based on its 2010 net earnings of $602 million and a price/earnings ratio of 12. Thus NAB paid $1.5 billion for BNZ and the latter has delivered total shareholder value of $12.4 billion to its Australian owners since late 1992. .. Telecom was sold to overseas interests for $4.25 billion in 1990 and since then has made distributions to shareholders, in the form of dividends and capital repayments, of $14.6 billion... an estimated $8.8 billion of these $14.6 billion distributions went to overseas shareholders.”

Gaynor summarises the situation: “A prosperous free enterprise economy is based on a high domestic savings rate and a strong productive sector that is well governed and mainly domestically owned. Australia and other above-average growth countries have these characteristics but New Zealand doesn't. Our low savings rate and under-investment in productive assets have hindered long-term stability and growth. For example, almost all the assets owned by the 10 largest ASX listed companies at the end of 1987, which had BHP in the top spot and Westpac at number 10, are still Australian-owned, whereas our largest listed companies at the end of 1987 were as follows: Fletcher Challenge (paper, forest and energy assets in foreign ownership), Brierley Investments, NZI (Australian-owned), NZ Forest Products (Graeme Hart-owned), Bank of New Zealand, Petrocorp (bought by Fletcher Challenge and on-sold to overseas interests), Lion (Japanese-owned), Carter Holt Harvey (Graeme Hart), LD Nathan (merged with Lion and now Japanese-owned) and Robt Jones Investments (Hong Kong-owned). Almost all of the assets owned by the next 10 largest NZX companies in December 1987, with the notable exception of the pre-split Fisher & Paykel, are also overseas-owned. These include Magnum (with its major operations Dominion Breweries and Countdown supermarkets now foreign-owned), Progressive Enterprises (Australian-owned), Wilson & Horton (Australian-owned) and INL (assets sold to Fairfax).”

So it’s this foreign ownership that determines how the relations between classes in NZ work. Income or wealth inequality is a symptom of this. The ruling class wealth increases in relation to its role as agents of international capital which requires NZ to be competitive. This means cutting costs, at all costs. The old class of national industrialists like Fletchers, Watties, Lion Breweries, Fisher and Paykel etc have been replaced as the dominant fraction of the ruling class by the upstart vulture capitalists, notably Brierley, Fay and Richwhite, Bob Jones, Alan Gibbs, Infratil’s Morrison, and CHH’s Hart, who have asset stripped uncompetitive firms and restructured them as international corporations with head office offshore. The second rank comprises the financial and property parasites who speculate on already produced value. Most of their combined wealth is invested offshore and is part of NZ’s biggest exports – profits. So while NZ industry has been restructured it is mainly at the expense of the working class.

Jobs, wages, taxes, social spending all have to be cut. As industry is restructured plants are closed down and many jobs are lost. Government legislates for reforms to implement these cost cuts. Thus since the deregulation of the economy under Labour in the 1980s we have seen these policies pursued by every government, cementing in the ‘openness’ of the economy. None of this was a surprise and was predicted by Marxists in the 1970s and 1980s. Today, it is an indictment of the lack of any serious political left in this country that a NZ Herald journalist Simon Collins has to rediscover the colonial causes of inequality in a series of articles. Yes it is colonisation that is the structural cause of poverty and discrimination and Maori child abuse.

Social Democracy bankrupt

That the Labour Party is now a Blairite party is evident in David Cunliffe’s comments on Collin’s articles. He criticises Collins for not coming up with solutions. Cunliffe’s solutions are a tame recycling of Blairite reformism. It boils down to NZ becoming more ‘competitive’ which means that workers have to be even more exploited. This is a recipe for increasing inequality as the share of value expropriated by the capitalists compared to that retained as wages by the working class constantly increases.

Revolutionary communists argue that social democracy is being exposed as bankrupt by the global economic crisis and will split as the left leaves the bankrupt Labour Party to join a new revolutionary Workers Party. Workers of the world are ready for revolution. All we need is the revolutionary party and program that opens to road to socialism.

Wednesday, February 01, 2012

Western imperialism, and the United States in particular, are in
an unrelenting crisis. In the bloody game for world domination, US
imperialism has just lost Iraq, which is aligning closer to Iran. It has
also practically lost Pakistan—all in one mere year!—and it will likely
lose Afghanistan as well, despite 9 years of occupation and war.

This is not an accident, but a reflection of the economic decline
of US imperialism. As we are seeing, the military decline of the US has
finally started to catch up with its economic decline. In a nutshell,
the latest aggression of western imperialism against Iran is an attempt
by the US to reverse its own economic decline by overthrowing the
present regime in Iran and replacing it with a US puppet regime. Why?
Controlling Iran is critical for controlling oil, both because of Iran’s
plethora of land-based pipelines, and because of its strategic position
next to the Strait of Hormuz, the world’s most important shipping route
for oil and gas.

Of Course It’s About Oil

Iran sits in the middle of the world theater when it come to oil
and the plundering of the natural resources of southern and central
Asia. Everything that passes by sea from Iraq or Kuwait, or through Iran
from western Asia, to anywhere else in the world, and vice versa, must
pass through the Strait of Hormuz, which is essentially part of Iran’s
territory. This includes 80-90% of the world’s oil. Thus, any
imperialist country that controls Iran also has its foot on the transit
of world oil. One does not need to be Einstein or a Marxist to
understand that the latest stiff embargo and sanctions against Iran is
not about its nuclear program, but about overthrowing the present regime
of the Mullahs and putting a pro-American puppet regime in its place.

Iran is a semi-colony. If the US does attack Iran, either
directly or via its Zionist muscle, revolutionaries must defend Iran,
and call for Iran’s victory, despite its reactionary regime. A victory
for Iran in such a conflict would shake up the entire
imperialist/capitalist world order. It would encourage the struggle of
the working class and the oppressed throughout the world. In particular,
it would encourage the Palestinians in their struggle for liberation
from the Zionist yoke.

We don’t know whether Iran is actually developing nuclear
weapons, as western imperialism and the Zionists claim. But even if it
is, its stock of missiles is a joke compared to the thousands of
missiles in the hands of the US and Europe, not to mention the unknown
number of nuclear weapons that Israel refuses to admit are in its
possession. The US’s nuclear arsenal alone is large enough to destroy
all life on Earth a million times. What we do know is that a Pakistani
scientist sold the Iranians some of the technological know-how needed to
build a nuclear weapon. Specifically, Iran got the plans for the kind
of centrifuge that can refine nuclear materials to a weapons-grade
concentration, as well as the plans for constructing bombs.

This illustrates that for the right price, plans and possible
materials for nuclear bombs can leak from Pakistan and possibly other
countries. In addition, countries and organizations can get the parts
and material for nuclear weapons for the right price, as an unknown
quantity of these was stolen or smuggled from the former Soviet Union.
Thus, one problem that imperialism faces is the trend of proliferation
of nuclear weapons to many semi-colonies. Such proliferation is
inevitable in the coming decades. India, Pakistan, North Korea (which is
technically still a deformed workers’ state), and Iran are just the
beginning. With today’s technology, one can put an entire nuclear bomb
in a suitcase. Thus it is inevitable present and future technology will
bring upon us wars that will become nuclear wars. If western imperialism
does not start it, the country under its attack will do so. Then many
countries will push the button, and it will be bye-bye to civilization,
and possibly the human race. Only a socialist revolution can prevent
this horrifying development.

Of course, the US accusations against Iran are nothing but
hypocrisy. It was the US that gave the Shah of Iran the secrets and
material for the bomb in the first place, so he could build two nuclear
plants to provide electricity for his country—all while Iran was sitting
on top of one of the largest reservoirs of oil in the world! (Asia Times, Jan. 19, 2012.)
The point is that for the right pro-imperialist regime (Israel,
Brazil), US imperialism has no problem with supplying the material for
the bomb.

The Imperialist Bloc of China and Russia Is Also a Target

Behind the embargo and sanctions against Iran looms the conflict
between US imperialism and the imperialist bloc of China and Russia.
While formally Iran is considered an “independent” country, in reality
it is falling into dependency on China, and thus it is becoming a
Chinese semi-colony. This is what is really alarming the US. China’s
trade with Iran reached $30 billion in 2010. China is also heavily
buying oil from Iran. Around 22% of China’s total oil imports consist of
Iranian oil. China has clearly told the Americans that they can go to
hell with their sanctions. According to Asia Times
(Jan. 18, 2012), “Washington taunted Beijing on Thursday by slamming
sanctions on Chinese firm Zhuhai Zhenrong Corp for allegedly selling
refined petroleum products to Iran. But China voiced ‘strong
dissatisfaction and firm opposition’ and expressed its intent to carry
on ‘normal cooperation with Iran in energy, the economy and trade.’
China has also reached a deal in regard to Iran’s largest oil field,
Yadavaran. China has an oil pipeline that starts in the Caspian Sea next
to Iran. The pipeline extends to Kazakhstan and then to Western China.
China already gets 15% of its oil and natural gas from Iran.
In addition to oil and gas, China has automobile and fiber optics
factories in Iran, and it is working on expanding the Tehran subway.
Anyone who thinks that China will let go of any of this is crazy.

Not only is the strategy of Chinese imperialism to have Iran as
its semi-colony, but China has also recently firmly planted its feet in
the neighboring Gulf countries, just as the fortunes of the US are
declining there. Saudi Arabia supplied 45.5 million tonnes of crude oil
to China in 2011—a 13% increase from 2010. Qatar and other Gulf kingdoms
are also shifting their exports from the US to China. According to Asia Times,
“Qatar is a major supplier of liquefied natural gas (LNG) to China, and
in the first 11-month period in 2011 it shipped 1.8 million tonnes, an
increase of 76%. Trade with the UAE exceeds $36 billion and the
sheikhdom is emerging as a major trans-shipment point for Chinese
exports to Africa and Europe.”

While the US was imposing sanctions on Iran, Chinese Premier Wen Jiabao was touring the Gulf states. That is, China’s answer to US meddling in Iran was to consolidate its grip not only on Iran, but also on the Gulf countries.
Indeed, Saudi Arabia was eager to bring Wen into the country despite
China’s relationship with Iran. This was a huge snub to the US by Saudi
Arabia. The list of Wen’s achievements is impressive, as the Gulf states
rushed to make record-breaking deals with China. As Asia Times reported on January 21, 2012:
“Wen witnessed in Saudi Arabia the signing of a contract between China
Petrochemical Corporation (Sinopec) and Saudi Aramco to build an $8.5
billion refinery with 400,000 barrel-a-day capacity in Yanbu on the Red
Sea coast by 2014, with the two sides holding 35.5%-62.5% stakes
respectively.” And in Qatar, Chinese accomplishments were just as
impressive. On January 24, 2012,
the same source reported that “Chinese Prime Minister Wen Jiabao, who
visited Doha last week, disclosed at a press conference on Friday: a)
China proposes to invest in the manufacturing of ‘downstream oil
products, which are most urgently needed by Qatar’; b) China and Qatar
signed an agreement to jointly build a refinery in Taizhou, Zheijiang,
in China; c) Chinese companies propose to participate in infrastructure
projects in Qatar; and d) China and Qatar are discussing a ‘long-term,
stable and comprehensive cooperative partnership’ in natural gas.”

The Isolation of Iran Is a Myth

What we are seeing is that the US and Europe are getting weaker
because of their economic crisis. That is not to say that China can
avoid the deepening crisis of global capitalism. But while the US and
its meek allies in Europe can only scream “sanctions and embargo,” China
is strengthening its economic grip on Iran and the Gulf states. This is
the real history. The declining powers talk war as the ascending
imperialist power (China) takes control over the disputed areas. Even
Afghan President Hamid Karzai announced in front of 2,000 tribal leaders
that he plans to get closer to Tehran. The reality is that the road
from Tehran to China is getting shorter by the day as China increases
its influence in Central/South Asia. That means that when US leaves
Afghanistan, China will get in there in a big way. It already has
projects in Afghanistan, such as copper, while the US wastes its
resources fighting “terrorists” there.

Similarly, as Pakistan increasingly snubs the US, the Chinese are
taking over. Historically, Pakistan was allied with Saudi Arabia
against Iran, i.e., against the Shiite regime that was perceived as a
threat to the Sunni elite in Saudi Arabia. In 2011, however, Pakistan
largely broke from the US sphere of influence and joined the
Chinese-Russian economic web. Today, Iran and Pakistan are lining up
together against the U.S. in the world trade war, and the Iran-Pakistan
natural gas pipeline is a done deal—with the blessing of the Chinese.
Thus, Pakistan is another country that is going to ignore the sanctions
against Iran.

In short, it is a total myth that Iran can be crushed by the
embargo and sanctions. It is surrounded by “friends” who need its oil,
while to its north, Russia is watching out for its interests. Russia
recently engaged in a revealing exercise in self criticism in regard to
Libya. It announced that it was a bad mistake for Russia to abstain when
the UN Security Council voted to allow NATO to bomb Libya. That will
not happen again, said the Russians. This is a signal that Russia will
not tolerate NATO bombing of Syria and Iran, because these countries are
under the influence of the Russian-Chinese imperialist bloc.

Bye Bye Petrodollars

The Western imperialist aggression against Iran only brings Iran
closer to Russia and China. Iran trades with Russia now in rials (Iran’s
currency) and rubles. Now all Iran’s new deals with China are made with
yuan (renminbi) and rials. Iran is making similar moves in oil deals
with Japan and India. The reality is that less and less Iranian oil is traded with petrodollars.

That also means that the Gulf countries in general are trading
less and less with petrodollars. For example, the yuan has started to
make itself known in Doha. “The China-United Arab Emirates (UAE)
currency swap deal which was signed during Wen Jiabao’s visit to Abu
Dhabi last week already brings the yuan to the Emirates. The deal with
the UAE is worth US$5.5 billion and the Chinese central bank statement
said that it aims at ‘strengthening bilateral financial cooperation,
promoting trade and investments and jointly safeguarding regional
financial stability.’ ” (Asia Times, Jan. 24, 2012.)

India is also snubbing the US by spending around $12-14 billion for oil in Indian rupees which “would subsequently be converted into a separate designated currency.” Tehran’s ambassador to Moscow, Seyed Reza Sajjadi, summarized the new emerging petrodollarless world order when he stated recently
that Iran’s trade with Russia “is based on our national currencies. We
started this work long ago. Iranian businessmen are buying products in
Russia and are using the rouble as [payment] currency. . . . The US
dollar has no [economic] support base. . . . There is a similar interest
on the Russian side.”
We are in the center of a trade and currency war between Western
imperialism and the Chinese-Russian Eastern imperialist bloc. Iran is
the big prize. Right now it is in the hands of the Eastern imperialist
bloc. Anyone who thinks that this bloc will drop Iran because of the
embargo and sanctions needs to wake up. What we are seeing is that the
petrodollar is losing to the ruble and the yuan. The sanctions and embargo will only strengthen the position of China in the Middle East and the Gulf countries.
Iran indeed feels protected to the point that it can laugh at the
European sanctions. Europe (read Germany, England and France) wanted to
delay the start of the embargo until July 1 in order to allow the weak
links in the South to find an alternative oil supply. Iran answered by
saying, in effect, “We don’t care about supplying Europe. We are locking
Europe out by starting European sanctions against us now!” Iran said
that there are anxious clients who will buy the oil that Iran supplies
to Europe.
(Financial Times, Jan. 26, 2012.)

If Iran stops supplying oil to Greece, Italy, Spain and other countries
in southern Europe that have no alternative source of supply, these
countries will slide even deeper into economic depression, and the European crisis will fly through the roof along with oil prices.

We are not saying that the dollar and US imperialism have been
beaten. Weakened is not the same as beaten. The US is still the most
powerful imperialist power. It will take time before the dollar stops
being the main international currency. Thus, the sanctions will still
hurt Iran. The rial is sliding dramatically against the dollar, causing
significant inflation in Iran. The ruling class and the Mullahs are not
seriously affected. They can find alternative oil buyers, and they can
trade in yuan and rubles. But the Iranian working class has no escape
from the inflation. The Iranian workers are pawns in the increasing
tension between Eastern and Western imperialism. They are the ones who
will pay the price of the global crisis of capitalism, which is
ultimately the cause of the embargo and sanctions.

The Way Forward for the Working Class

As China’s global influence increases, and it attempts to use the
broken backs of its workers as a stepladder to the height of
imperialist world power, the workers and villagers are fighting back and
confronting the state and its cops. Their Iranian brothers and sisters
can follow their example. They can fight inflation by striking for a
sliding scale of wages pegged to inflation. They can take over the oil
industry and the oilfields, nationalizing them without compensation.
That means overthrowing the reactionary, capitalist Mullah regime and
replacing it with a workers’ government. The best way for the Iranian
workers to confront US imperialism is to fight it without hindrance from
the oppressive regime of Ayatollah Khamenei and company.

In the US and Europe, workers must take action to smash the embargo and sanctions against Iran. As sanctions are an act of war,
the working class in Europe and the US has a class duty to fight to
defeat their own ruling class’s imperialist war machine! They should
combine their own class struggles with actions against the imperialist
sanctions and embargo. The main enemy is the banks and the ruling class
at home. This means that workers must fight against the racism and
chauvinism employed against Muslims, which is used to poison the mind of
the workers and pacify them while imperialism carries out the embargo
and sanctions. Down with all anti-Muslim propaganda, government spy
programs, and anti-immigrant laws!

The ruling class in the US is using nationalist chauvinism and
racism not only to develop support for a possible war against Iran, but
to hurt the workers in the US as well. They are using the threat of
“terrorism” from Iran and the Arab world as an excuse to curb workers’
rights in the US. Under the new law signed by Obama, the FBI can grab
anybody, including any American citizen, and incarcerate them
indefinitely for having a “loose” connection to “terrorists” and to the
“enemy” behind them—Iran, for example—without filing charges or
producing any evidence to back them up. This means that the US is
becoming a dictatorship under the cover of the “democratic” two-party
system.

We, the American working class, must fight this and other
reactionary laws that curb democratic freedoms, such as the right to
assemble and protest in public places, the right to express our
political opinions, and the power of organized workers to go on strike.
By defending Iran against imperialism, we also defend the democratic
rights of the workers and anyone who fights this reactionary Congress
and President. Down with the new American dictatorship! For a fighting
workers’/labor party that fights for a workers’ government! For a
militant, worker-led mass struggle to overthrow the dictatorship of the
Democrats, the Republicans, and Obama. They are the ones who conspired
to allow the police and the FBI to detain anyone permanently without
trial. They are the ones behind the brutal repression of Occupy and the
indiscriminate killing and incarceration of Black and Latino youth. The main enemy is at home—not in Tehran and Beijing!

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red rave is the loud mouth of members of the Communist Workers' Group of Aotearoa/New Zealand, committed to building a new communist international to lead workers to the revolutionary overthrow of global capitalism. Since 2010 we have been in a Liaison Committee with the Communist Workers' Group (USA), the Revolutionary Workers' Group (Zimbabwe) and the Revolutionary Workers' Group (Brazil).